Oct. 19 (Bloomberg) -- A federal law’s definition of
marriage as being only between a man and a woman was voided by a
U.S. appeals court in a decision that may entitle the widow who
brought the lawsuit to an estate tax refund.

A three-judge panel U.S. Court of Appeals in New York ruled
yesterday in a 2-1 decision that a key section of the Defense of
Marriage Act unconstitutionally bars the U.S. government from
recognizing same-sex unions and improperly discriminates against
gay men and lesbians who marry in states that allow gay
weddings.

The ruling upheld a lower-court decision in favor of Edith
“Edie” Windsor, who sued the federal government over a
$363,000 federal tax bill she received after the 2009 death of
her spouse, Thea Spyer. Windsor, 83, said the U.S. failed to
recognize her 2007 marriage to Spyer in Canada.

The Defense of Marriage Act, or DOMA “was an unprecedented
intrusion into an area of traditional state regulation,” the
panel said in yesterday’s ruling.

“This is a reason to look upon Section 3 of DOMA with a
cold eye,” the judges said. “Because DOMA is an unprecedented
breach of longstanding deference to federalism that singles out
same-sex marriage as the only inconsistency (among many) in
state law that requires a federal rule to achieve uniformity,
the rationale premised on uniformity is not an exceedingly
persuasive justification for DOMA.”

Yesterday’s decision was the first by a federal appeals
court ruling that government discrimination against gay people
“gets a more exacting level of judicial review, known as
‘heightened scrutiny,’” said the American Civil Liberties
Union, which represented Windsor.

Definition Rejected

Section 3 of the law, which the court overturned, requires
that in determining the meaning of any federal law or
regulation, “the word ‘marriage’ means only a legal union
between one man and one woman as husband and wife, and the word
‘spouse’ refers only to a person of the opposite sex who is a
husband or a wife.”

Windsor and Spyer were married in Toronto and their
marriage was recognized in New York, where they lived. Spyer’s
estate would have been exempt from the taxes if she had been
married to a man.

Roberta Kaplan, a lawyer for Windsor, said her client will
now seek a refund of the tax she was forced to pay.

Tax Refund

“We are pleased that the federal circuit that represents
three states that provide their gay and lesbian citizens with
the right to marry affirmed the decision of the district
court,” Kaplan said in a statement. “Given her age and health,
we are eager for Ms. Windsor to get a refund of the
unconstitutional tax she was forced to pay as soon as
possible.”

Yesterday’s ruling leaves intact some portions of DOMA,
including a provision that states that don’t allow gay marriage
don’t have to recognize same-sex unions in states that do.

U.S. District Judge Barbara Jones in New York, ruled in
June in favor of Windsor, concluding that the Section 3 portion
of the act violated the equal protection clause because there
was no rational basis to support it.

After the Justice Department said it would no longer defend
DOMA in court, the Bipartisan Legal Advisory Group of the U.S.
House of Representatives challenged Jones’s ruling and argued
the law should be upheld. Former Solicitor General Paul Clement,
who argued on behalf of the group, urged the judges to overturn
the lower-court ruling.

Clement said that at the time DOMA was enacted, no states
permitted same-sex marriage. Congress’s intention was “to
maintain this traditional definition that was in place in all 50
states,” he said.

Improper Substitution

Kaplan argued last month before the appeals court that
Congress improperly substituted its own definition of marriage
in DOMA, instead of respecting state decisions on marital status
as it had done in the past.

She told the judges last month that DOMA is
unconstitutional because Congress had no legitimate government
interest that was rationally served by the law. She urged the
judges to review the statute with a heightened level of scrutiny
because it discriminates against a group that has suffered from
bias.

The appeals court concurred with Kaplan, saying that
homosexuals are still “significantly encumbered” and not in a
position to adequately protect themselves from “the
discriminatory wishes of the majoritarian public.”

The appeals court also said the section had improperly
attempted to “enforce a uniform definition of marriage.”

Argument Sidestepped

“DOMA’s classification of same-sex spouses was not
substantially related to an important government interest,” the
appeals court said. “Accordingly, we hold that Section 3 of
DOMA violates equal protection and is therefore
unconstitutional.”

The majority of the appeals panel also said its analysis
would “sidestep” the argument that “same-sex marriage is
unknown to history and tradition.”

“Law (federal or state) is not concerned with holy
matrimony,” the judges said. “Government deals with marriage
as a civil status -- however fundamental -- and New York has
elected to extend that status to same-sex couples.”

Windsor, who worked for International Business Machines
Corp., and Spyer, a clinical psychologist, met in 1963 and
became engaged in 1967, according to court filings.

The two married in Toronto in May 2007, Windsor said. Spyer
left all of her property to Windsor, including the apartment
they shared.

Pride, Dignity

“This law violated the fundamental American principle of
fairness that we all cherish,” Windsor said yesterday in a
statement. “I know Thea would have been so proud to see how far
we have come in our fight to be treated with dignity.”

Windsor’s case follows a decision in May by the U.S. Court
of Appeals in Boston that the law was unconstitutional. That is
the only other such ruling on DOMA by a U.S. appeals court.

Chester Straub, the third judge on the panel, disagreed
with yesterday’s ruling that DOMA is unconstitutional. He said a
1971 U.S. Supreme Court dismissal of a challenge to a Minnesota
law limiting marriage to opposite-sex couples decided the issue.

“Whether connections between marriage, procreation and
biological offspring recognized by DOMA and the uniformity it
imposes are to continue is not for the courts to decide, but
rather an issue for the American people and their elected
representatives to settle through the democratic process,”
Straub wrote in his dissent.

Ruling Cheered

“The federal courts keep coming to the same conclusion --
treating married same-sex couples differently than married
different-sex couples is just plain unconstitutional,” said
Susan Sommer, LAMBDA’s litigation director.

DOMA affects more than 1,000 federal laws that refer to
marriage, according to the opinion by the appeals court in
Boston. The law may affect more than 100,000 couples, the judges
said.

In February, U.S. Attorney General Eric Holder told
Congress that the Obama administration would no longer defend
DOMA.

The five-member Bipartisan Legal Advisory Group of the U.S.
House of Representatives consists of House Speaker John Boehner,
a Republican, and the Republican and Democratic majority leaders
and whips. The group’s two Democratic members, Nancy Pelosi and
Steny Hoyer, didn’t support the appeal.

Supreme Court

The Obama administration and DOMA supporters have each
asked the U.S. Supreme Court to rule on the constitutionality of
DOMA. The court may say by the end of year whether it will take
up the issue in its current term, which runs until June.

Windsor has petitioned the U.S. Supreme Court to hear her
case, Kaplan said yesterday. The court hasn’t decided whether to
hear her case, or any of several other challenges to DOMA.

New York, which didn’t allow gays and lesbians to wed in
2007 when Windsor and Spyer married, recognized same-sex unions
that were performed in jurisdictions where they were legal.

New York Governor Andrew Cuomo, who last year signed a law
legalizing gay marriage in the state, said yesterday that the
appeals court’s decision should provide momentum toward
achieving marriage equality.

“What we did here in New York can only be the beginning,
and we must continue to work together until all Americans are
free to marry whom they love and are entitled to all of the
rights and benefits of marriage equally, regardless of sexual
orientation,” Cuomo said in a statement.

Same-sex marriage is permitted in the District of Columbia
and in six states: Connecticut, Iowa, Massachusetts, New
Hampshire, New York and Vermont.

The cases are Windsor v. U.S., 12-2335, 12-2435, U.S. Court
of Appeals for the Second Circuit (Manhattan).